Shares of Life Insurance Corporation of India (LIC) traded in the red, down more than 2 percent, on plans to raise wages by around 17 percent for its over 1.1 lakh employees.
On March 15, LIC announced that it has received approval from the government for a wage revision for its employees, effective from August 1, 2022. This announcement benefits over 110,000 employees across the organization, LIC stated.
The hike will impact LIC's bottomline, with an estimated annual implication of around Rs 4,000 crore. Once the salary additions have been implemented, the state-run insurance behemoth could see its annual wage bill balloon to more than Rs 29,000 crore.
For this fiscal year, arrears of around Rs 7,000 crore have to be included into the total wage bill, which will take the total wages paid out for FY24 to Rs 32,000 crore.
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The contribution to the National Pension System (NPS) has been raised from 10 percent to 14 percent for nearly 24,000 employees who joined LIC after April 1, 2010. Additionally, a one-time ex-gratia payment has been disbursed to more than 30,000 LIC pensioners and family pensioners.
Earlier, CNBC-TV18 reported citing its sources that more than 1 lakh employees of LIC will see a 16 percent increase in their base pay starting August 2022, and when allowances are taken into account, the total wage hike could go up to 22 percent.
At 11.30am, the LIC shares were quoting Rs 904.05 on the NSE, lower by 2.25 percent. On March 15, the shares settled lower by 3.5 percent. Over the past five sessions, the insurance player's stock is down almost 10 percent.
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